Bank Vozrozhdenie posts 1H 2011 net profit of 712 million roubles

Russia’s Bank Vozrozhdenie has posted a 1H 2011 net profit of 712 million roubles under IFRS.

The bottom line grew more than threefold year on year, with assets increasing 19% to 174 billion roubles and net interest income rising 36% to 1.86 billion roubles.

Before provision the loan portfolio grew 5.3% year on year to reach 132.7 billion roubles, as retail loans increased 15.2% year on year, and corporate lending rose 3.2%, which the bank said reflected a stronger mortgage lending recovery. Bank Vozrozhdenie added that the quality of its loan portfolio was also improving with the NPL ratio declining to 8.31% from to 8.78% in 1Q 2011 to 11 billion roubles.

It noted also, however, that charges to provisions had also increased to 12.1 billion roubles in 1H 2011.

Dmitry Orlov, Chairman of the bank’s Management board, was upbeat about the results, saying that the operational performance of Bank Vozrozhdenie reflected a strong performance in a low rate environment.

“In the second quarter the bank managed to achieve strong operating results across all business lines. Despite low rates environment in the banking system we demonstrated long-awaited growth of net interest income due to both funding cost optimization and active growth of the loan portfolio in the most profitable segments.”

Orlov also noted the mortgage recovery was enabling Bank Vozrozhdenie to achieve the lending structure it sought.

“As loan demand recovers we are heading towards the target structure of the loan portfolio – retail lending rapidly gains momentum largely driven by mortgages as a flagship banking product, while SME lending have become the driving force of the overall loan book growth in this quarter. Steady growth of fees and commissions on the back of active client’s transactions provides stable operating revenue.”